This week's annual meeting could be the last conventional one for the Credit Union National Association as it is presently constituted.
The venerable trade group is in the midst of a top-to-bottom self- examination directed by a select committee charged with gathering ideas for reform from across the industry.
At next year's gathering in Philadelphia - an event that has already dubbed the "Constitutional Convention" - some kind of consensus on a new structure will be hammered together.
Industry observers aren't yet hazarding any guesses on how far the revolution will go, but most expect something big to come of it. Even its management acknowledges that there is dissatisfaction with the Madison, Wis., trade group.
Association president Ralph Swoboda said the self-examination had its origins in a lunch he had in March with Michael B. Kitchen, chief executive of a subsidiary company, CUNA Mutual Group.
"We talked a lot about the strains and stresses in the credit union movement and a need to start a dialogue in the credit union movement."
Indeed, a CUNA-sponsored survey that elicited responses from 478 credit unions found that 86% of the institutions thought CUNA's structure should be changed at least slightly.
To direct the process, Mr. Swoboda and Mr. Kitchen picked a "steering committee" of 23 current or former industry officials. The group will ask credit union officers what changes they want to see in the trade association. Their answers will be used to generate a series of papers that will be discussed at a series of meetings across the country, leading up to the Philadelphia convention.
Two aspects of CUNA now under scrutiny are its membership structure and its relationship to subsidiary businesses.
Credit unions are not direct members of CUNA, but belong to state leagues which make up the national trade group. Some in the industry argue that a clique of league presidents exercises undue influence over the association, and some credit unions want to play a larger role.
The starkest examples of dissatisfaction with this membership system came earlier this year when Navy Federal Credit Union, the nation's largest, and No. 3 Pentagon Federal Credit Union, Alexandria, Va., quit CUNA after the association sued the federal government over a regulation that severed shared management arrangements between corporate credit unions and trade groups.
Both institutions opposed the suit and believed their objections were ignored. Interestingly, Tom Hughes, chief executive of Vienna, Va.-based Navy Federal, was tapped to serve on the steering committee for the self- examination.
Other large credit unions value the CUNA for its lobbying prowess, but feel they get little from the state-level leagues.
"I think I need CUNA, but it doesn't make sense to have more middlemen than you need," said Paul Horgen, chief executive of $427.2 million-asset IBM Mid-America Employees Federal Credit Union in Rochester, Minn.
But smaller credit unions generally take a kinder view of the leagues, in part because they depend on them for supplies and training.
The CUNA survey illustrated this dichotomy. Nearly 30% of credit unions with more than $100 million of assets thought the current relationship between the national association and the state leagues "works very poorly and should be radically changed." Only 6% of credit unions with less than $10 million of assets supported that characterization.
Some large credit unions believe the leagues, backed by small institutions - which are greater in number but have fewer cumulative assets and members - stifle the interests of big institutions in the trade group.
John Siefken, chief executive of $1.4 billion-asset Citizens Equity Federal Credit Union, Peoria, Ill., has blasted the reform effort in a series of letters to his peers. He believes that nothing will come of it because CUNA supporters on the steering committee will try to preserve the status quo.
In an Oct. 13 letter addressed to committee member and Michigan Credit Union League president Kenyan Bixby, Mr. Siefken wrote: "Please read this carefully: You and your fellow travelers are incapable of fixing the problem because you are the problem. It is in your vested interest to maintain the status quo of leading credit unions instead of following them."
Leaders of large credit unions aren't the only ones who have raised concerns about the committee. Noting that most credit union officials on the committee represent large institutions, some managers of small credit unions fear their interests aren't represented.
However, the member representing the smallest institution on the committee disagrees.
So far, said Errol Louis, chief executive of $4 million-asset Central Brooklyn Federal Credit Union in New York City, no one has tried to squelch him in meetings.
"I don't see size as a significant factor in how the conversations have gone," he said. He added that the chiefs of bigger institutions are "more opinionated and don't hesitate to speak their minds. I think that's what they were brought to do."
Stan Hollen, chief executive of $1.6 billion-asset Golden 1 Credit Union, Sacramento, Calif., has plenty of opinions of what CUNA should do. First, he believes it should spin off CUNA Service Group, a for-profit subsidiary that includes a credit card processor.
"CUNA must concentrate on being the best trade group it can be," Mr. Hollen said. "It's taking too much of leadership's time and energy to be involved in product development and delivery."
Mr. Swoboda said that Mr. Hollen is not the only one with this impression.
"There is a sense in some people's minds that a lot of the trade group's efforts get diluted if there are other businesses being directed," Mr. Swoboda said.
Whether that or anything else fundamental to the current CUNA structure will change remains to be seen. Committee members and others close to the process who were interviewed for this story said that, so far at least, everything is on the table and open to change. In fact, one source said, a league president floated the idea of eliminating leagues.
But James Blaine, a committee member and chief executive of State Employees Federal Credit Union, Raleigh, N.C., cautioned that it's too early to predict the end result.
"The process is just getting started," Mr. Blaine said. "You shouldn't shoot the messenger yet; people should wait."
